Rahm Emanuel made his first appearance on the talk shows after accepting the Chief of staff position from Obama with ABC's THIS WEEK and made it very clear that Obama is going to be focused on the economy and tax cuts for the middle class.

STEPHANOPOULOS: And I understand that, that's going to be the focus, but clearly, you just said that the president-elect is going to move on the middle class tax cut right away. I'm just asking if he wants to postpone, not cancel but postpone, the tax increase on the wealthier Americans.

EMANUEL: The core economic part of his strategy is the middle class. That is the basis of it, George. And the economic plan was built on that. And whether -- when it's dealing with, A, the first year of the tax cut, but also the immediate things of dealing with the reforms that are related to both education, health care, energy, taxes.

I know there's been a lot of talk regarding Rahm on the web and elsewhere. You know my feelings about Rahm so I won't repeat myself, but I think I'd rather see Rahm out of the Congress so we'll be able to have more liberals and Progressives elected there so it really didn't bother me at all. And if Republicans are complaining about him, well, that's a good thing too.

STEPHANOPOULOS: I know that the president-elect also believes he

has the right economic plan, overall, which includes a tax increase on

wealthy Americans. But is he willing to consider postponing that tax increase until the country has emerged from the recession?

EMANUEL: George, President-elect Obama and Vice President --President-elect Obama and Vice President Joe Biden have all said that their economic plan at this juncture is based on giving 95 percent of the working Americans a tax cut, about $1,000.

EMANUEL: It is a net tax reduction. It was built around this basic premises, as I just outlined, that the fact over the years, the middle class have been squeezed consistently by rising costs on education, health care and energy, as

well as a diminishing income. And their median household income has declined $2,000. And you must have an economic program that focuses on them.

It was not built for any particular, you know, data at this particular moment. It was built on the fact that the middle class had been hurt, and to have a strong recovery and a sustained recovery over a period of time means that the middle class must be the focus of the economic strategy.

STEPHANOPOULOS: And I understand that, that's going to be the focus, but clearly, you just said that the president-elect is going to move on the middle class tax cut right away. I'm just asking if he wants to postpone, not cancel but postpone, the tax increase on the wealthier Americans.

EMANUEL: The core economic part of his strategy is the middle class. That is the basis of it, George. And the economic plan was built on that. And whether -- when it's dealing with, A, the first year of the tax cut, but also the immediate things of dealing with the reforms that are related to both education, health care, energy, taxes.

Those immediate -- those issues that are usually referred to as long-term are immediate, and this opportunity in crisis provides, as the president-elect has said repeatedly, the opportunity to do things that Americans have pushed off for years.

Health care costs for median -- seven years ago, the health care

costs were $5,000 plus for a family of four. Today they're $12,000.

Today, we export $700 billion of our wealth to foreign countries. You

cannot sustain an economy for the middle class and for the entire

country in which two issues -- just take energy and health care -- are

really squeezing the middle class.

So this provides an opportunity to finally tackle the issues that for too long have been postponed, kicked down the road, kicked down the road basically. And so that's what he says. We should use this opportunity, this crisis, to finally tackle the issues that have hurt the economy, both in the immediate basis as well as over the long term.

STEPHANOPOULOS: I think we're going to put off that question for now. But let me just ask two quick political questions before I let you go.

No. 1, Senator Reid...

EMANUEL: Thanks.

STEPHANOPOULOS: ... signaled that he's going to -- wants to deny the chairmanship of the Homeland Security Committee to Senator Lieberman. Do you think that's appropriate, or in the interests of getting beyond this election should Senator Lieberman be allowed to retain his position?

EMANUEL: This is -- look, as the chief of staff for the new president, he's going to be focused on the basic problems facing the country. As you outlined, it's the first time in four decades we have -- there's going to be a transfer of power while you have American troops fighting not just one but two wars.

Second, we have a huge economic crisis here at home that is looming large. That is going to be the focus of his policies. What happens on the House and Senate, on chairmanship is their business. But the business of what we have to do when we get sworn in is focusing on what the American people care about. Priority one is the economy.

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